Buffett's firm now owns 700 million Bank of America shares

Warren Buffett's company is now Bank of America's largest shareholder.

Bank of America said Tuesday that Berkshire Hathaway had exercised its warrants to buy 700 million shares of the bank. Berkshire received the warrants in 2011 when Buffett invested $5 billion in the bank.

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The shares, which are worth roughly $16.5 billion today, give Berkshire control of about 6.5 percent of the bank based in Charlotte, North Carolina.

Berkshire had been receiving $300 million a year in interest on its preferred shares. Buffett decided to trade that for common shares because Bank of America is now paying a dividend of 48 cents per share annually.

Buffett's Omaha, Nebraska-based conglomerate is also a major shareholder in Wells Fargo, American Express and Goldman Sachs.